Looking to get out from underneath your company but don’t know what to do? Your Company, Brand or Business may be worth more than you think.
Don’t kill it, try to sell it.
Do you have a great product, company or a brand you have built? Maybe you even have a successful Etsy store you want to sell. Perhaps you don’t have the capital or time to invest anymore – but you know the brand and the company is still worth something. Sometimes there are many reasons why a person can’t move forward with their company. When this happens, think about selling your company, don’t kill it.
Your Brand or Company May Be Worth More than You Think
Capitalism, as its name suggests, is based on the ownership of Capital. What is capital? Basically, capital is anything that can be traded for something else. Any amount of money is capital, as it can be traded for a huge variety of things. Personal items are also capital because they can be sold. Items such as houses, cars, and ‘other items of value’ fall under this category.
Capital is anything of value that can be turned into cash. If a blog is earning a #1 spot on Google, it’s worth about $250,000 in Google SEO Adwords for search results alone. But unless it’s a blog that can turn a profit for products sold, it’s nothing more than good content. That is, unless it’s in the hands of someone who knows how to really market a blog to its fullest potential.
But in Economics 101, we learned what Capitalism is. And it usually boiled down to a tangible item like a house or a car. In reality, there may be digital goods that far outweigh a tangible object in monetary value. We need to start thinking about that idea more.
A lot of business owners and even small Etsy makers, crafters, etc. don’t know what to do with the small business or brand they have spent years building, so they just quit. That’s the worst thing to do. Because you just never know if there is someone out there looking for what you’ve built. And you could be underestimating what you HAVE.
Think about it: If you have built up a social media following, a list of customers, a product that is scalable and blog content, etc. you have a solid foundation and a brand. Now, I’m not saying that every brand created is worth half a million dollars, but your brand could be worth more than you think. And if you can no longer stand to look at it, it could be a fresh new venture for someone else, and a little cash in your pocket.
A lot of people are looking to buy already established businesses, or breathe new life in old business that existed decades ago. If you think about it, it makes sense: Buy a company with a product or brand that is already known, or a proven seller. Such is the case for old brands getting new life and being bought for low prices at auction. Or take Narragansett Brewing Co., which was founded in 1890, closed it’s doors in 1985 and was purchased in 2005. The stories are inspiring : old brands getting new life
Maybe you have a website in place with ecommerce and the product just needs a little tweaking or marketing expertise. FarmHouse Fresh products are awesome products on their own, but the reason it became so wildly successful so quickly is because it was in the hands of a marketing professional who got it in the hands of Oprah. She knew how to do this. There are hundreds of Farmhouse Fresh-esque products out there, even on Etsy who will never see the pages of Martha Stewart Living or Oprah’s Favorite Things because they don’t have a PR or Marketing professional behind them.
If you aren’t sure if you want to sell your business outright and just need to raise capital or seed funding, check out my article on Angel Investors and Venture Capital Firms
What is your company worth, or How much can you sell your business for?
Valuing a company can be tricky, but the general rule of thumb is to think of a business as a stream of cash. Then value your business based on that stream of cash. Revenue is the best approximation of a business’s worth. If the business sells $100,000 per year, you can think of it as a $100,000 revenue stream. Depending on what your business or product is can make it harder to value.
- Do you offer products or services?
- Are your products scalable (meaning, can they be made or recreated by someone other than you)?
- Do you see a long term future and growth with your products or service?
You can also take your current YTD sales and combine it with marketability and future growth estimate to give you a basic ballpark figure for what your asking price can be.
“Bridget’s Widgets” creates cloth dolls and sells through her online Etsy store. She has been in business for 3 years. Her first year she sold $4,000 worth of product. In year 2 she sold $8,000 worth of product and in her 3rd year, she is at $15,000 per year. Based on the current yearly sales and the steady growth in sales per year, we can see that her client base is growing and sales are steady and increasing. Her product is one that can be scaled and either recreated in-house or outsourced by a factory. We also know that the long-term growth for her brand/product could easily be sold for the next 10 years.
Based on that info, we can estimate that Bridgets Widgets the Company is worth somewhere around $32,000
Here is a helpful business valuation calculator I have found online to give you a rough estimate of your company’s worth.
Be totally honest about your financial figures and any assumptions, as fabrication serves nobody when buying or selling a company. Note the smallest grey circle, that will be your estimated business value based on your calculations.
Selling Your Business
A lot of people are intimidated by the thought of selling their company, or they don’t even think about it when the need arises. We are still kind of stuck in an old mindset and fail to realize that online businesses (or products) are definitely worth something. Don’t fall into the mindset thinking your business or product isn’t worth anything to anyone else. If you have a product, a following and sales, it is worth something to the right person looking for it. Keep in mind, it may not be thousands of dollars, but it is worth something to someone, and you owe it to yourself to find out.
A lot of business buyers won’t even touch a company unless it is turning major profits but what I think they fail to see is if the product and idea is there, the growth they want can happen if it’s just marketed well. Business buyers have the chance to get in on a ground floor opportunity and earn quite a bit for a product that is already doing well (with a limited budget).
Bottom line: If you have a strong company or brand you have built online, you have a company that is worth something. Let the buyers decide what it’s worth if you’re not sure. Your Following and client list alone could be worth something. Don’t discount the hard work you have invested in your company, product(s) or brand over the years.
The best places I’ve found online to buy or sell a company:
Flippa -So far, this is a #1 site for selling or buying websites (mostly). There are a lot of turn key websites and blogs listed here.
Businesses For Sale. com I like simple, user friendly interface of this website a lot. If I were going to list a business for sale, I might go with this one. Although I do think BizBuySell gets better traffic (see below)
Merger Network MergerNetwork is a social network for business professionals. Create a post about the type of business you want to buy or sell, and send it to your connections. It seems to be relatively active, but I am not sure how it is working for the members.
eBay – People list physical businesses as well as online businesses, e-commerce sites and blogs here all the time.
BizBuySell, You can list your business for sale or browse and find a business for sale on this website. There are also brokers out there who may be willing to sell your company for you.
BusinessBroker.net This is a good site to list and find businesses for sale. As with the others, the pricing is about the same to list ($99 for 2 months)
BizQuest BizQuest is also like BizBuySell. There are all kinds of businesses listed, from Franchises to indepently owned Hair Salons to online gift basket businesses.
KEY: Once you list your business for sale, make sure you are utilizing social media to get the word out. Use Twitter, a blog (great for SEO) and Facebook, and share the link to your business listing for sale.
LinkedIn – You can try posting your business or website for sale in a relevant group board. I have found this Buy/Sell Business Group, however, I have requested to join twice and still no response. So unless you are approved by the moderator, you won’t be able to post or connect there.
Find a Business Broker – Most brokers may only deal with higher profit businesses, so unless your company is turning hefty profits, it might not be in their best interest to sell your company, as they earn a cut from the sale. Still, worth exploring.